Lord Higgins: My Lords, I thank the Minister for that reply, although it is scarcely reassuring in light of today's headline news. Why are the Government determined to add to the dangers of navigation in the channel by ignoring the risk that supertankers and other vessels, often sailing under flags of convenience with masters who are not familiar with the channel and whose radar is distorted by the wind turbines,will crash into the turbines and create repeated environmental disasters? Why were consultations not completed before a decision was reached? What distance between the 98 square mile wind farm and the navigational channels do the Government regard as safe in view of the present circumstances?

Lord Truscott: My Lords, the noble Lord asks a number of questions, rather than just one, but I assure noble Lords that Navy safety was a key consideration in the decision-making process. To that end, the Maritime and Coastguard Agency, which is the Government's adviser in this matter and has overall responsibility for navigation safety, has been closely involved in considering the wind farm proposal.
	The Government consulted the MCA on radar reflection, and I am satisfied that the issue canbe managed. The noble Lord also referred to manoeuvrability and safety. Very few vessels currently cross the wind farm site, so its presence should not add significantly to navigation congestion.
	The north-west boundary of the wind farm, facing Black Deep, will be in the shallower areas, so mariners will seek to avoid it. There is a minimum of 650 metres between turbines, so we cannot rule out the possibility that some vessels may be able to turn in the wind farm itself, should that be necessary.

Lord Triesman: My Lords, I do not believe that it would be productive today to look at the sanctions that might arise. The decision taken at the G8 meeting was unanimous and I expect that those who supported it, and supported the unanimity, will draw the conclusion that they must work through the consequences. Any other step would be quite dishonourable.

Lord Dykes: My Lords, notwithstanding the truly shocking assassination of Hrant Dink on Friday and the fact that Turkey is still proceeding somewhat sluggishly in its progress on the various EU criteria, does the Minister not agree that Turkey is a very important country and that there seems to be broad support for its membership of the European Unionin the long term? With that in mind, will the Government encourage the resumption of chapter-by-chapter negotiation?

Lord Roper: My Lords, in the Statement that the Minister repeated to the House on 8 January on the sixth review conference, he reported that agreement had been reached among the states parties to make a concerted effort to persuade other countries to join the convention. What are the Government doing to implement that, particularly with respect to the12 members of the Commonwealth which have not yet become parties to the convention?

Lord Foulkes of Cumnock: asked Her Majesty's Government:
	What recent consideration they have given to representations from Football DataCo Limited on the effect on English and Scottish football of the directive on the legal protection of databases(96/9/EC) and the Copyright and Rights in Databases Regulations 1997 (SI 1997/3032) as interpreted by the European Court of Justice.

Lord Foulkes of Cumnock: My Lords, is my noble friend aware that although the voluntary agreement is welcome—it brings in £3 million to football clubs—it in no way compares with well in excess of £6 million that was available previously through the levy? Scottish clubs have thus experienced a reduction of60 per cent, which affects small clubs very badly indeed. It does not have a huge effect on major clubs, such as Heart of Midlothian, Arsenal and Tottenham, but it is a serious matter for the small clubs that I mentioned earlier; I could mention many more. I urge my noble friend to talk to Dick Caborn and his colleagues in DCMS to see if more can be done to ensure that football is supported at every level with a proper levy from the betting operator.

Lord Kingsland: This amendment has been inspired by the patent and trademark attorneys, who are a much smaller body than most of the other regulators affected by the Bill. Their resources, premises and personnel, for example, are more limited than those of the Law Society or the Bar Council.
	The wording of the amendment requires the Legal Services Board to act proportionately in respect of these smaller regulators in discharging its functions. What is appropriate for some of the regulators is certainly not appropriate for others. In particular, the board should consider the resources and viability of the regulators that will be affected by its decisions and actions.
	Such regulators are, I suggest to the Committee, low-risk, non-consumer-focused professionals with excellent conduct records, and they should be recognised as such in the new regulatory regime. The regulatory costs to the associations, as well as to their members, are low, and they place a very low burden on the wider regulatory system.
	One characteristic of trademark and patent attorneys is of particular importance: they are in the unusual position of being able to opt out of their associations. These associations anticipate a real risk that over-regulation of those who have the freedom to opt out could well reduce or restrict entry to their professions. It is not currently mandatory to be a member of either of the two main professional associations connected with these activities in order to practise or represent clients. The members can leave the regulated system at any time they wish. The costs could clearly increase after the Bill has been enacted if members leave the system and, in those circumstances, the position of both the main regulators could, in time, become untenable.
	The purpose of the Bill is to ensure more effective regulation of the legal profession. That is of course well understood, but one unwelcome side effect is to reduce the effectiveness of regulation in the more specialised or technical areas of the law. That is the background to the amendment. I beg to move.

Lord Maclennan of Rogart: I hope that in this debate we will go beyond comforting words to a little more precision about how the Government intend to ensure that the general principle of proportionality, to which they have given assent, will be reflected in the Bill in a manner that reassures those who have been engaged in dialogue with the Government from the two organisations that regulate a relatively small number of specialist attorneys—the Chartered Institute of Patent Agents and the Institute of Trademark Attorneys—that their particular problems have been recognised.
	I have been advised that those organisations have been in direct dialogue with the department and that the language of the amendment is particularly addressed to deal with their concerns. When looking at the Bill, one has to consider whether by embracing their concerns one may be opening up wider problems, but, on the face of it, the recommendations embodied in this useful amendment seem to go a long way towards spelling out the apprehended opportunities for a disproportionate response to the regulation of relatively small regulators. I view this as a valuable opportunity not only to probe the Government's benevolent general intentions in these matters—"beneficent" might be better than "benevolent"—but also to probe how they are approaching this. We will come back to the issue of proportionality on the broader canvas on later amendments.

Baroness Ashton of Upholland: I found that an interesting debate. I have to confess that I did not know where the amendment came from, although I could see that noble Lords would want to have this debate not only at this point, as noble Lords said, but throughout the Bill's passage. Perhaps I may say through the good auspices of noble Lords and through Hansard that I would be very keen to meet the trademark and patent agents' representatives, whom I have not seen, to discuss this further. They have been in touch with the department, but thereis nothing quite like having the conversation oneself to seek to reduce concerns. I take the point madeby the noble Lord, Lord Maclennan of Rogart. My nice comfortable little words may be all well and dandy but he would like something that goes a bit further.
	At this stage in our deliberations perhaps I may say a little more about "proportionate" and take up the point about the "jigsaw effect" raised by the noble Lord, Lord Campbell of Alloway—who discussed the subject with me earlier today. I think that that is a good way of describing some of the themes running through the Bill. When we eventually end this Committee stage perhaps he will reflect on whether we have covered all the elements of the jigsaw and on the possible discussions on that.
	I would expect the board to have regard to much of what has been set out by the noble Lord, Lord Kingsland: the regulator's resources, the effect on regulatory fees and the extent to which entry to or retention in the regulated sector applies. I agree with the organisations that are concerned about a "one size fits all" approach that the regulations should not attempt to provide such an approach . We have sought to define a way of dealing with that in Clause 3 by saying that the board should be proportionate. It very specifically looks at how to ensure that the regulation is appropriate for the bodies that are to be regulated. We have not defined it in the Bill specifically because we want "proportionate" to be considered on a case-by-case basis. That is a very well-trodden path not only in legislation but, more importantly, in how we try to deal with it in practice. I am not sure that we could find a definition that would not lead us in some ways to an arrangement that could have a detrimental effect on consumers or the legal professions themselves. Perhaps I may give an example.
	The board could find itself under a lot of pressure, where one regulator might be disadvantaged and another might derive an advantage because people moved between one regulator and another, to ensure that its actions did not lead to one regulator losing members. However, that might be a natural and even—dare I say it?—desirable consequence when there is a regulator that might be damaging the regulatory objectives. The board's decision could lead, if you follow the principle, to restricting competition in the provision of those activities. That would be inconsistent with the regulatory objectives to promote competition—which we have already discussed—in the provision of reserved legal services. We could end up unable to tackle the issues underpinning the regulatory objectives as effectively as we might. I absolutely take the point that if we are to use these words, we need to be clear what we are trying to do. Perhaps I may say a little more about that.
	As noble Lords will know, the Hampton review on regulatory inspections and enforcement looked at this question. In Section 2(3) of the Legislative and Regulatory Reform Act we established that,
	"regulatory activities should be carried out in a way which is transparent, accountable, proportionate and consistent"
	and that,
	"regulatory activities should be targeted only at cases in which action is needed".
	Looking across legislation and good practice, we believe that—rather than setting out a definition of proportionality, which I think would move us into a "one size fits all" arrangement—the term has a natural meaning which is widely accepted.
	In Clause 48 we have enabled the board to issue policy statements about the work that it will be doing. That may be a way of addressing the specific point—by including in the policy statement the issue of further work on defining what we mean by "proportionality". Those being regulated might find a policy statement a better place to consider the issue. It would be very clear, and everyone would be absolutely sure about what was being looked at. It would also have the benefit of enabling additional information or changes to be effected appropriately.
	It is important that the board, the Office for Legal Complaints and the regulators consider what is meant by "proportionate", but that could be done on a case-by-case basis. We should not try to constrain them with definitions that will not be appropriate in every case and that would result in the board having to think about a "one size fits all" approach.
	Finally, the noble Lord, Lord Hunt of Wirral, returned us to the issue of the Legal Services Board and the regulated bodies working together in close partnership. The whole thrust of the legislation is underpinned by achieving clarity about the roles of the different bodies and about the nature of the relationship between them. Again, we will return to this theme as we work through the Bill. It is essential that they collaborate and work together co-operatively to address these issues.
	I therefore resist a definition for the reasons I have given. I do, however, accept that proportionality is essential for resolving the problems mentioned by those who have helped to draft the amendment, and I am grateful to the noble Lord, Lord Kingsland, for tabling it. I hope I have assured noble Lords that we accept that clarity is essential and that it is essential that the bodies behave in that manner. In that spirit, I hope noble Lords will feel that we have at least begun to address the issue and that they can take some comfort from my words to the Committee.

Lord Hunt of Wirral: I want to explore further exactly what the Minister means. I agree with the noble Lord, Lord Maclennan, that the patent and trademark attorneys will be very grateful for the opportunity to go through their concerns in detail, and I welcome the way in which she proposed it. However, my point was that the larger regulators, too, feel that the balance is not yet right. Although the Bill is generally welcomed, the new chairman of theBar Council, Geoffrey Vos QC, made the following point, which I would like the Minister to deal with. He said:
	"When it comes to the proposed oversight regulator ... the thresholds allowing it"—
	the LSB—
	"to intervene in the day-to-day work of frontline regulators are set too low".
	That, of course, is a matter for the Bill to make clear. I hope at some stage as we go through the Bill that the Minister will be able to satisfy us either that the thresholds will be changed or that we need something akin to the excellent amendment of my noble friend Lord Kingsland to make that clear up front in the Bill.

Baroness Ashton of Upholland: The third option is that I will convince the noble Lord that the thresholds are right. I am grateful to Geoffrey Vos who has been to see me to discuss this. I know that the Bar Council in particular and other regulators are looking to ensure that the descriptions that we have given in your Lordships' House and another place have clarified the essence of what we are trying to do. We will talk about thresholds later on in Committee, and I hope that, as we go through the Bill with Members of your Lordships' House and with those who will be regulated, I will be able to say more to address their concerns directly.
	We should bear in mind that the tighter we make the definitions in the legislation, the less room there is for those negotiations, discussions and debates between the oversight regulator and the regulators themselves, which I would be reluctant to lose because there is a lot to be done there. I am hoping that, by setting out the way in which those debates and discussions would be conducted and the essence of what would be in them, we may provide the comfort that those organisations are looking for. It is not always a question of changing the Bill, as noble Lords know; it is about expressing precisely what we are trying to do in a way that gives comfort to those who want to see us do it properly.

Lord Hunt of Wirral: I am pleased that my noble friend Lord Kingsland has raised the question of cost. As we plough through the regulatory impact assessment, we of course become aware that:
	"The estimate assumes that the underlying nature and volume of regulatory activities under the new LSB will not be substantially different from those performed under the current regulatory framework".
	That is the basis on which the new regulatory framework is proceeding. Sir David Clementi said several times that this is not the FSA, but a new regulator—the Legal Services Board—with a clearly defined supervisory function.
	In our Select Committee report we questioned the costing, particularly in the light of some of the evidence we received. The Bar Council, for example, argued that the assumption in the RIA was,
	"incompatible with the way the Bill is drafted, and would not be sustainable even if there were a genuinely light touch regulator".
	The then President of the Law Society told us that:
	"Our perception is that the costings are actually based on the light touch model that Sir David Clementi and the Lord Chancellor have in mind, which we do not think is in the Bill".
	Other witnesses were concerned that the Legal Services Board might move away from the light touch model over time. PricewaterhouseCoopers's conclusions about the costs of the Bill are explicitly based on the assumption that the LSB will operate at a level of activity not substantially different from that performed under the current framework.
	If one compares the RIA with the Bill, there are clear differences, and I suppose what my noble friend is doing so cleverly in this amendment is stressing that the role of the board is to ensure that the approved regulators act in a way which is compatible with the regulatory objectives—a clear supervisory approach over the front-line regulators. If this amendment were put in the Bill, how much more sensible would be the relationship between the RIA and the Bill itself? That lies at the heart of the concerns so clearly expressed by my noble friends Lord Kingsland and Lord Campbell of Alloway, and that is why I agree with what they have said.

Baroness Ashton of Upholland: The noble Lord, Lord Maclennan, is absolutely right to say that the purpose of this stage of our deliberations is to define the issues that noble Lords feel are of great concern. I hope that he will recognise that one of my roles—I am not the policy Minister on this legislation—is to carefully consider what is said in debate. That is why I am grateful to all noble Lords who have, helpfully, intervened and spoken.
	Of course, I would say that I think that the language is clear, but I take the point. Parliamentary counsel—who, as the noble Lord will appreciate, are always wonderful in all circumstances—are, in my experience, alive to ensuring that issues raised in your Lordships' House have been appropriately dealt with. I know—and I say this not so much to your Lordships but, through your Lordships, to outside bodies—that your Lordships have the advantage of being used to working in the language of parliamentary counsel. It is sometimes quite hard for those unfamiliar with it to see that, by being written in a particular way, the language does not suggest what a lay person might immediately think of. It is also possible to define things in a way that might appear helpful at first, but actually lends itself to difficulties later on, as mentioned in our previous discussions on the word "proportionate".
	The Government's policy has always been that day-to-day regulation rests with the approved regulators. We want them to use their regulatory experience and knowledge to ensure that high standards are maintained and that the oversight regulator intervenes only where regulators fail to meet these high standards. We do not intend in any way, shape or form that the board should become a micromanaging regulator. That is why there is the statutory duty in Clause 3 to ensure that, when carrying out its activities, the board has to have regard to better regulation principles. That includes the fact that activity should be targeted only at cases where action is needed. Those principles are extremely important in the context of this debate.
	We think that this is sufficiently clear in the Bill; part of our purpose is to make sure of that. We want the board to be in a position to take action where acts or omissions on the part of an approved regulator have had or are likely to have an adverse impact on the regulatory objectives. That means that, where a regulator is failing, the board can enforce the statutory obligations under Clause 27 on the approved regulators to act in a way that is, as far as is reasonably practicable, compatible with the regulatory objectives. We think that this creates a sufficient demarcation of the roles of the board and the approved regulators without placing the duty suggested in statute. Looking at this clause and Clause 27 in concert might enable noble Lords to see more clearly what we have been seeking to do. The amendment could have the opposite effect and lead to more micromanagement, which is not what noble Lords, the Government and, I am quite sure, the professions want.
	The Government's clear principle is that the costs will be paid by the professions. My discussions with them have shown that there is a concern to make sure that we set up the regulatory framework in a proportionate way. Sir David Clementi looked at preparing some broad cost estimates. PricewaterhouseCoopers prepared its report based on its knowledge and assumptions; we asked it to do so because of its great expertise in this area. It worked with the professional bodies in estimating the costs that noble Lords know about.
	As we establish the Legal Services Body and the OLC, we will continue to work to constrain any costs. In so doing, we are making sure that we do not add on any proposals for greater activity from the Legal Services Board. The implication is generally, although not always, that adding on activities costs more. Our firm position—and I have offered to talk further to the professions about this—is that costs should be considered in terms of the clear understanding that we expect them to be paid by the professions.
	We hope that in what we have sought to do in the Bill we have clearly demarked the relationship between the regulatory bodies and the Legal Services Board. We are mindful of the costs issue and want to make sure that the principles of better regulation are followed, meaning that the Legal Services Board intervenes only where necessary. I hope that noble Lords will support that fundamental principle.

Lord Hunt of Wirral: I think that we should press the Minister a little further on this important amendment. Nothing in the Bill indicates that the Legal Services Board is intended to act as a supervisory regulator, leaving day-to-day responsibility with the approved regulators and exercising its powers only where they are clearly failing. The Bill is cast in terms that would enable the Legal Services Board to set out detailed templates for the way in which it considered approved regulators should discharge their functions, to micromanage them and to substitute its view for theirs, even where their approach is plainly within the range of reasonable decisions. That is the Bill as is stands.
	We wrestled with this problem in the Joint Committee. We were mindful of the fact that Sir David Clementi had looked at two options. The first was a unitary system of regulation with a body along the same lines as the Financial Services Authority taking over responsibility from the professional bodies. Secondly, he looked at the continuation of regulation based on the professional bodies, but with a new board with supervisory powers to ensure that the approved regulators carried out their tasks effectively. Sir David's final report favoured the second option, but that is not in the Bill. The Joint Committee spent some considerable time taking evidence on that point, and I want to press the Minister on this amendment because it would solve at least one major problem.
	Unanimously in the Joint Committee, we said at paragraph 176 of our report:
	"We believe it is important that the LSB has an effective range of powers, but it is also important that the draft Bill ensures that they are only used where necessary, in order to avoid undue micro-managing of the approved regulators".
	We continued in paragraph 178:
	"The draft Bill should ensure that—consistent with the Government's policy that lead responsibility should rest with the approved regulators—the Legal Services Board acts in partnership with the approved regulators".
	The Government appeared to favour that approach, stating in their response to the Joint Committee's report:
	"The LSB should exercise its powers only where approved regulators are clearly failing".
	There is nothing in the Bill to indicate that the LSB is that supervisory regulator.
	When the Legal Services Board is established, it will not look to the Government's response to the Joint Committee's report in order to determine what its powers are and how they should be exercised; it will look to the Bill, which will then be a statute. Surely the Minister must realise that there is a considerable problem here, which can be addressed only by amendments to the Bill. That is what the Joint Committee recommended and what the speakers in this debate have said. So far, the Minister has not been able to respond positively. I hope that she will reflect and return to the House with a clearer guideline to the LSB, set out in statute, that it is the supervisory regulator and does not have any day-to-day responsibility.
	To conclude my attempt to persuade the Minister, I point out that there are a number of advantages in continuing to base regulation on the professional bodies. First, it is much easier to ensure that regulation is independent of the Government. Secondly, the professional bodies are well established and building on them avoids the need to incur the costs of setting up a new regulatory approach. Thirdly, the professional bodies may be more successful than a regulator on FSA lines in getting the profession to agree. Lastly, the professional bodies are closer to day-to-day practice and thus able to decide what is necessary and to develop appropriate regulatory responses. The Government acceptedSir David Clementi's recommendations, so why are they not yet able to put them into practice and into effect in the Bill?

Lord Maclennan of Rogart: I appreciate the noble Baroness's intervention, but I had a further point to make. The Minister drew our attention to Part 4 and suggested that there was something in the drafting of Clause 27, on the duty of the approved regulator, which might give comfort. I am bound to say that I find no comfort at all in Clause 27 with respect to the purposes of the amendment that the noble Baroness claims is redundant. Part 4, by its very location asthe fourth part of the Bill, seems to me to deal witha series of subordinate issues. Those issues are important, but those clauses do not deal with the primary role of the Legal Services Board. Clause 27, to which the Minister drew our attention, concerns the approved regulator, not the Legal Services Board. Frankly, it is by the way to the argument that we seek to deploy.

Baroness Ashton of Upholland: I am very grateful to the noble Lord. I thought it might be something of that nature, but I did not know. I am sorry if I am bland; that is not a word that I associate with myself very often. I will attempt not to be. Please accept that for me the purpose of this discussion was to understand what noble Lords felt was missing in the Bill and to explain the concerns that I had about the amendment. I have taken legal advice and advice from parliamentary counsel on the amendment, as noble Lords would expect, and there is a concern that because the Legal Services Board might be thought to be responsible for every aspect of what the regulators were doing, it would require it to be more active than would necessarily be the desire of those behind the amendment. I felt it was perfectly reasonable to say to your Lordships that that was my concern. I know it is not the intention of the amendment, but it could be an effect. That was why I wanted to think about how the amendment was worded.
	I also said to noble Lords that the principle of the operation between the Legal Services Board and the regulated bodies was one on which I felt there was a great deal of agreement. I said that noble Lords had expressed extremely succinctly their concern that they did not feel that this was effectively laid out, in the early part of the Bill in particular. I said that I understood the points that had been made, and I was prepared to go back to discuss this with my colleagues in the department and to look at it again. But I was also trying to say that it was not that the Government did not intend it to be the relationship that noble Lords wanted, but rather we hoped that we had achieved it in the totality of the Bill. I apologise to the noble Lord if that was a bland set of statements, but it was not meant in any way to raise the temperature in the Committee; quite the opposite. It was meant to say that our intentions are the same. If noble Lords believe that we have not quite got it right, of course I will go away and think again. That is what noble Lords would expect me to do at this stage in the Bill. On that note, I hope that the noble Lord will be able to withdraw his amendment, with the commitment that I have made.

Lord Kingsland: I am most grateful to the noble Baroness for her response and to all noble Lords who have spoken. It is a well known technique from the Government side of the Committee to attack the details of an amendment and not address the principle that lies behind it. I am certainly not going to accuse the Minister of taking that approach towards this amendment this afternoon. As I understand it, what the noble Baroness is saying to the Committee is that the principle that lies behind the amendment, as has been reflected in all speeches by noble Lords this afternoon, is entirely acceptable to the Government. That is to say, the task of the Legal Services Board is supervisory, and direct regulation is the task of the approved regulators. I see the noble Baroness nodding so we are ad idem about that.
	The difficulty that the noble Baroness has with Amendment No. 33A is that it goes too far in the wrong direction. There is a danger with the text of Amendment No. 33A that it would allow the Legal Services Board to stray beyond its supervisory role. Is there any objection to the Government, on Report, coming up with a better amendment than Amendment No. 33A, which would reflect exactly the balance that the noble Baroness and all noble Lords who have spoke want to achieve? I see the noble Baroness nodding—

Lord Kingsland: I am most grateful to the noble Baroness for that response. It was genuinely helpful, not just in the way that members of the Diplomatic Service sometimes use that word. The difficulty that I and other noble Lords who have spoken have is that the noble Baroness is really saying, "We agree with the principle, but we believe that if you look at the whole Bill, it reflects that principle".
	Unfortunately, it is extremely difficult for the vast majority of people who will take an interest in these matters, once the Bill becomes law, to have to read the whole Act in order to find out what the function of the Legal Services Board should be. It would be much simpler if that function was crisply stated early on by one phrase or sentence. The noble Baroness has, I think, accepted that by some very clear body language—a vigorous movement of the head.
	I think we are making progress and I shall not endanger that by saying anything further on this matter; but I wanted to raise one other related issue. The noble Lord, Lord Maclennan of Rogart, in his first intervention, talked about the Legal Services Board questioning the judgment of the front-line regulators. This is an important and distinct point that is dealt with in a series of amendments, beginning with Amendment No. 45. My noble friend Lord Campbell of Alloway said, in a crisp intervention, that if this matter were to be an issue, we would probably need a clause that somehow constrained the discretion of the Legal Services Board.
	I simply state the problem, without wanting to open up a separate debate under an amendment that is less appropriate than Amendment No. 45. Suppose that a front-line regulator considers the objectives set out in Clause 1—competition, consumer interest and so on—balances them all, takes into account all the considerations that it should have done, makes a judgment and acts. Suppose that the Legal Services Board looks at that decision, looks at the objectives, takes into account also all the objectives that it should have done, but makes its own judgment, different to that of the approved regulator. When we reach Amendment No. 45, I will submit that it would be wholly inappropriate for the Legal Services Board to intervene in those circumstances. The fact that it did not agree with the front-line regulator should not be grounds for intervention by the Legal Services Board, as long as the regulator has properly addressed all the considerations that it should have addressed. That is precisely the same approach that the administrative court would take in relation to a decision by a Minister.
	The noble Lord, Lord Maclennan of Rogart, rightly said that it would be wrong for the Legal Services Board to stray into the area of an approved regulator. I picked up that point because it struck me as an important contribution to the debate; but it would probably not be helpful to the Committee to develop it now, because we will have an opportunity to do so when we consider Amendment No. 45. Meanwhile, I beg leave to withdraw the amendment.

Lord Hunt of Wirral: I agree with my noble friend. Like my noble friend Lord Kingsland, I do not propose to move Amendment No. 35, which stands in my name as well as his. So far as concerns Amendment No. 34, I should like to hear from the Minister how she envisages that the Legal Services Board will carry out its regulatory objective of increasing public awareness of the legal rights and responsibilities of individuals, especially consumers.
	I should also like to hear the Minister's response to my noble friend Lord Campbell of Alloway on the issue of quality. I know that the ombudsman, who made representations to us along the lines of the amendment, is very concerned that there should be a real influence on the quality of legal services and standards within the professions. If the LSB is to justify its existence, and especially the significant costs associated with its establishment and continuing operation, the ombudsman feels that it must be able to demonstrate a willingness and an ability to make a real difference to the customer of legal services, particularly the high-street client. Allied to the point made by my noble friend is one of the key points behind this legislation: there must be some way of ensuring that the very high quality and independence of legal services continues.
	Once again, I declare, as I have on many occasions, my interest as a practising solicitor. The new chairman of the Bar Council, Geoffrey Voss, said that our reputation is excellence, and excellence has become the passport for legal services across the world. It is vital that we ensure that quality remains right at the heart of these reforms, and any reassurance that the Minister can give us on that point will be very welcome.

Lord Kingsland: I am most grateful to the noble Baroness for her response and to all noble Lords who have intervened in the debate. Throughout the Committee, I believe there is a consensus about the role of the Legal Services Board and how dangerous it would be if it sought to interfere with a system that is plainly working extremely well.
	The Government have given me confidence in the view expressed by the noble Baroness that there is no intention whatever of the Legal Services Board being proactive in this area. It merely has a duty to ensure that a system is out there in civil society to ensure that the appropriate standards are kept. Provided the board is satisfied that that is the case, that is the end of the matter and there will be no activism under Clause 4.
	I continue to believe that "ensure" is better than "assist", but I will leave the noble Baroness to reflect on that between now and Report. I beg leave to withdraw the amendment.

Lord Hunt of Wirral: After checking Appendix 2 in the joint select committee's report, I agree that we did not receive evidence from the Institute of Paralegals, which I understand was founded in 2003. We are very grateful to the noble Lord, Lord Neill of Bladen, for describing the representations that we have only just received from James O'Connell, who is described as the chief executive of the Institute of Paralegals. Although the noble Lord, Lord Clinton-Davis, knows the solicitors' profession even better than I feel I do, these paralegals include, as the noble Lord, Lord Neill, pointed out, a whole range of people who have nothing to do with law firms. I am struck by the fact that 13,000 of them work in Citizens Advice Bureaux up and down the country—13,000 non-lawyer paralegal volunteers. They are therefore a group of people to whom we should pay attention. It is just sad that had not heard from them before. But we have now heard from them, and I look forward to hearing—

Baroness Ashton of Upholland: Quite reasonably, Clause 159(3) states:
	"Arrangements ... may include provision as to the terms on which assistance is to be provided by the Board (including provision as to payment).
	So, in circumstances where the board offers these services, one could charge.

Lord Maclennan of Rogart: moved AmendmentNo. 36:
	Clause 6, page 3, line 14, leave out "Secretary of State" and insert "Lord Chancellor"
	On Question, amendment agreed to.
	On Question, Whether Clause 6 shall stand part of the Bill?

Baroness Ashton of Upholland: I agree with the noble Lord about making sure that members of the Consumer Panel should be appointed in accordance with the prevailing standards of public appointments. I also agree that public advertisement is often the best way of ensuring that the most suitable candidates are given the opportunity to apply for the relevant positions. The noble Lord will not be surprised to hear that I do not want to set out the detail in the Bill. It is not in line with the way in which consumer panels in other walks of regulatory life have been dealt with; equally, we want to make sure that the prevailing standards of the time can be used. As I have said, and as the Government believe, public advertisement is often the best way of doing this.
	The appointment provisions for membership of the consumer panels of other regulators, such as the Financial Services Authority and the Office of Communications, do not set out the detailed procedures to be followed. The arrangements appear to work well, which is why we have chosen to follow that route. I am not aware of any criticisms about the appointment of consumer panel members in either case. Those were the precedents that we sought to follow.
	What lies underneath the amendment is the desire to make sure that the processes and procedures used are transparent and can be examined. When producing its annual report, the board should include details of the Consumer Panel, how it is operated and how the functions for the panel and the board have been discharged; we would also expect it to include information on the appointment of members. Thatis the best place in terms of transparency and accountability—the board is of course accountable to Parliament through its annual report—to ensure that this has been dealt with effectively and well. Including this information in the board's annual report to Parliament, which can then be challenged, is better than putting it in the Bill. I hesitate to put it in the Bill, as we should enable best practice to be pursued. I hope that the noble Lord will feel that including this information in the annual report, so that it can be challenged, will make the process crystal clear and transparent.

Baroness Ashton of Upholland: I was going to say little more than that, if that is all right. It is desirable. We expect equal opportunities, probity, openness, transparency and proportionality—all those key words within the appointment guidance—to apply to these circumstances. It is not beyond the realms of possibility that the board could say in advance how it proposes to appoint, which may deal with the noble Lord's point about being open and clear.
	If the noble Lord will indulge me, I will say one more thing about selection. We have made onekey distinction between the appointments for this Consumer Panel and other such panels—those under the Financial Services and Markets Act and the Agriculture Act, Ofcom and so forth. All of those are appointed with the approval of the Secretary of State—or the Treasury, in the case of the Financial Services and Markets Act—but in this case the board will appoint. It is worth making that distinction because it may be welcomed.
	There is nothing between us. I am quite happy to think about whether the board should say in advance how it proposes to deal with appointments. As I said, it is desirable to have public advertisements, but not to specify that in the Bill.

Baroness Ashton of Upholland: I am grateful to the noble Lord for the opportunity to say a bit more. I am not sure that I can give him detailed figures at this stage, but I shall endeavour before the next stage to look at the matter in greater detail. Undoubtedly he will know that we need to think about how this will be set up and, therefore, what we will be looking for.
	We thought carefully about the establishment of the Consumer Panel after Sir David Clementi proposed it in his review of legal services. It is an area in which we have wide support from stakeholders because it presents an opportunity to get proper representation of consumers within the legal services framework. We have based the provisions on a number of other regulators, including the Financial Services Authority, which have similar panels providing expert advice on consumer issues and needs.
	Under Clause 9, we have allowed the Consumer Panel to establish committees to serve the purposeof advising it on matters relating to its function. Clause 9 also allows the panel to regulate its own procedures as well as the procedures of any committee that it establishes, subject of course to the panel ensuring that each committee contains at least one member of the panel.
	Part of the reason for this is that we cannot foresee necessarily what skills the LSB may need on the Consumer Panel. For example, it may want an organisation to nominate someone with specific experience. The CBI might be asked to nominate someone who could provide expertise on the interests of commercial consumers. That may be an appropriate thing to do under a committee structure, and we want to provide the flexibility to enable the panel to do that.
	The provisions that allow for remuneration and expenses for members of the committee who are not also members of the panel are standard provisions that, again, we have extracted from other legislation so that the panel can carry out its functions appropriately and, in the example that I have already given, when there is some particular area of expertise that it would be appropriate to have.
	Clause 10 deals with the duty on the board to consider representations made by the panel. It provides that the board must give an explanation in the form of a notice if it disagrees. This provides a transparent procedure that ensures that the panel's representations are considered by the board. It is very much about allowing for the first time the consumer's voice to be heard in the legal services framework and about ensuring that the board has to say why it disagrees with representations. In a sense, it is about ensuring that we have consumer confidence in the new framework.
	With what I have said about seeing whether there is anything further that I can give the noble Lord on costings, I hope that that gives him a flavour of what we are seeking to do in these clauses.

Lord Kingsland: This is another amendment inspired by the patent and trademark attorneys and foreshadows the arguments thrown up by the amendments grouped with Amendment No. 38A, which would introduce a permanent practitioner panel. As we have just seen, the Bill provides for a Consumer Panel but gives no opportunity for a professional representation. While consumers need protection they do not always understand the realities of running a legal practice. In our submission the LSB needs to hear both sides of the story to make informed and proportionate decisions.
	The Chartered Institute of Patent Agents and the Institute of Trade Mark Attorneys believe thatsome measure of professional input is required. Either the regulators ought to be allowed to represent themselves or at least their representative arm should perform that role. They say that this is particularly important for the smaller professions and especially necessary for areas of more specialised expertise.
	I should explain the relationship of this amendment to the next group. In some respects, the Opposition prefer Amendment No. 38 to Amendments Nos. 38A, 38B, 38C and 38D because of a concern that a handpicked practitioner panel set up under the Bill could bypass the professional organisations. Its representations might be seen as being the voice of the professions thereby undermining the views of the professional organisations themselves, for example, the Bar Council, the Law Society or, indeed, the Chartered Institute of Patent Agents or the Institute of Trade Mark Attorneys, in circumstances where those views are distinct from those of the practitioner panel.
	However, we accept that a practitioner panel may be a more realistic objective to pursue, not least because it follows the recommendations of the Joint Committee. In any event we believe that a provision along the lines of Amendment No. 38 or 38A must be in the Bill. I beg to move.

Lord Hunt of Wirral: I strongly agree with my noble friend Lord Kingsland and the noble Lord, Lord Maclennan. The Government have decided to set up a Consumer Panel in this legislation. One needs to ask why. As the Minister is aware, there is strong feeling that there is an over-representation of the consumer interest here. I refer back to the debates that we have had about the public interest and the independence of the profession. But the Government have decided to go beyond allowing the normal representations from consumer bodies and have laid down in statute that there should be a Consumer Panel. In an earlier debate the Minister said that that was modelled very much on the Consumer Panel set up inter alia to advise the Financial Services Authority. But that is only one part of the mechanism by which the Financial Services Authority is informed. It has a Consumer Panel but it also has a practitioner panel. We shall deal with the detail of a practitioner panel in just a moment, but the Minister needs to explain why the Government have gone with just one limb of the expertise which the Financial Services Authority can draw on.
	It is a slightly dangerous analogy for the Minister to use because the Government and, in particular,Sir David Clementi, said that the Legal Services Board is not the FSA. I suppose that the Minister could say that this is an example of why it is different because it does not have a practitioner panel. But that is not really an argument. Why is it thought necessary to have the consumer interest so strongly represented? I agree with the noble Lord, Lord Maclennan, that CIPA and ITMA have a strong case when they say that there needs to be some guarantee of professional input, particularly for the smaller professions. It is especially necessary for areas of more specialised expertise such as patent or trade mark practice.
	The Financial Services Authority, a confessed light-touch regulator—although some of us have our doubts about that—needs the expertise of the practitioner as well as the consumer interest right at the heart of its operations. So why have the Government decided to seek only a Consumer Panel in this instance? My noble friend's amendment is very good. In fact, it is so good that I see that I have appended my name to it. The Minister needs to explain why the new clause that we are discussing cannot be inserted. If she is about to accept Amendment No. 38, I shall have to rethink whether I shall move Amendments Nos. 38A, 38B, 38C and 38D. I look forward to her explanation.

Lord Neill of Bladen: I find that I nearly always agree with everything that the noble Lord, Lord Borrie, says, but today is an exception. He is missing some of the politics, with a small "p", here. One of the motivating forces driving this Bill, to which the Government have responded, seems to me, based on the evidence that we heard in the Joint Committee, to be the consumer interests. They have been extraordinarily articulate, particularly Which?, and I congratulate it for the skills in advocacy that it has deployed.
	The consumer interests have run a very strong case in favour of a Bill such as this one, and they are very strong on the imperfections in the delivery of legal services by the existing professions, of which they are highly critical. They are also very critical of the proposal, in an amendment that we will debate later, on the practitioner panel. They want the chairman of the LSB always to be a lay person, and so on. The position that they are coming from is really one of strong animus against a watchful eye over the whole legal profession. That being the basis on which the consumer panel is founded, it seems to me only fair, on the basic principles of natural justice, that there should be some other panel to represent the interests of the professions, including the very small professions, which have been referred to, including trade marks and patent agents. Trade marks are smaller numerically. To have a body that could make an input into the LSB from practitioners would be a very healthy balancing and would make the whole of this new set-up look much fairer.

Baroness Ashton of Upholland: Throughout the legislation there are opportunities where the board is required to consider representations. Clauses 48, 49 and 195 provide that the board must have regard to and consider representations on matters such as policy statements, the rules to be made and so on. One of the difficulties with this argument is that, if we were talking about two bodies that are exactly the same, it would look very neat to specify one body and then the other. The purpose of the legislation is to regulate the legal professions through the LSB and the front-line regulators—the legal professions. The route of representation, and the route whereby the regulators could take the board to judicial review, is therefore well established and well documented throughout the Bill.
	The missing bit when we put the Bill together did not concern whether the consumer dominated the debate. In the relationship between the board, the front-line regulators, the professions and their opportunities to make representations on representation and regulation, the missing bit— because of the nature of that relationship, because we have specifically stated in the Bill that their representations must be taken to account, and because they have the right as regulated bodies to claim judicial review—was that no formulation stated that the board also had to listen to consumers in the way that my noble friend Lord Borrie described—in a manner that is co-ordinated, focused and so on—while bearing in mind the breadth of work that consumer organisations traditionally undertake.
	This is about balancing back. Within the Bill the legal professions and the regulators are well covered. Nowhere do we say in terms that, to balance that, it is also appropriate that the board listens to consumers. It sets up a panel consisting of people with the right sort of expertise, and through the structure, it can bring in expertise—I gave the example of going through the CBI—so that commercial consumers' interests are taken on board. The board has to listen to the panel. It cannot just put it in a corner and ignore it. That is what we sought to do. This issue is not about ignoring the practitioners; quite the contrary—it is about saying that this legislation relates to all those people who are involved one way or another in the legal profession, and we must not forget the consumer.
	I am very comfortable about discussing this matter before the next stage of the Bill, but I urge noble Lords to look at the way in which the Bill is structured and at all the representations. When all that is balanced against this clause, I hope that noble Lords will feel that we have ensured that consumers are represented, although I do not mean that they will dominate in a negative and unhelpful way. I absolutely agree with the noble Lord, Lord Maclennan, that this measure is not designed to be adversarial among consumers. I also absolutely agree that those involved through the regulatory functions, together with practitioners, may often be best placed to talk about what needs to happen next. I agree with that completely but, looking at the Benches that the noble Lord represents and the champions of consumer interests that many of his noble friends are recognised to be, I think he will also agree that it is right and proper to ensure that the consumer is not lost in this. That is the basis of this measure.
	I hope that Members of the Committee will at least reflect on that explanation and feel that it repositions the issue. I also hope that the noble Lord will feel able to withdraw the amendment, particularly as there will be an opportunity to discuss this matter further between now and the next stage.

Lord Hunt of Wirral: Perhaps I may say one thing and then of course I shall give way. It was the unanimous view of the Joint Committee—Members of bothHouses, lawyers and non-lawyers—that, to quote paragraph 185:
	"We believe it is in the public interest that the LSB should establish and consult a Practitioner Panel alongside the Consumer Panel. We recommend that the draft Bill be amended to require the LSB to establish a Practitioner Panel which should include representation of legal academics".
	I give way.

Lord Hunt of Wirral: I do not believe the Minister needs the assistance of the Viscount, Lord Bledisloe, as I was about to demonstrate. We need a structure and these amendments give us an opportunity of reflecting on what kind of structure should follow the Minister's acceptance, in principle, of the balance that was so effectively argued by my noble friend. I hope the noble Viscount accepts that there needs to be some kind of structure. If one simply allows representations from the most powerful bodies, one will neglect a number of different areas that might not be covered. I think the Joint Committee was persuaded that the practitioner panel should sit alongside the Consumer Panel on grounds of balance.
	In the regulatory objectives there is already a duty on the board of,
	"protecting and promoting the interests of consumers".
	It will be assisted in that by the consumer panel. Those objectives are not yet worded to our satisfaction but there is also the objective of,
	"encouraging an independent, strong, diverse and effective legal profession",
	and the objective of,
	"promoting and maintaining adherence to the professional principles".
	The Joint Committee had in mind that in reaching conclusions on how to meet those regulatory objectives it would be of assistance if the Legal Services Board had the opportunity to consult a practitioner panel, not only on day-to-day regulation, but also in areas similar to, say, Clause 11 on the need to promote research and to explore further, with practitioners, how best to achieve the regulatory objectives. If one asks the Financial Services Authority whether the practitioner panel has been of value, it would answer in the affirmative. In defence of the noble Lord, Lord Borrie, who probably needs no defence from me, he argued at Second Reading very effectively that the chair of the Legal Services Board should not be prevented from being a lawyer. He did not feel that lawyers should be excluded from becoming chair of the Legal Services Board because that would,
	"carry too far the view that lawyers must give way to laymen in this modern age".—[Official Report, 6/12/06; col. 1187.]
	That was a very persuasive intervention.
	This Bill must be all about balance and I hope that when the Minister considers how to take forward the commitment that she has just given, she will also bear in mind the unanimous view of the Joint Committee.

Lord Hunt of Wirral: I agree with the noble Lord. Although the Secretary of State's approval is required for the appointment or dismissal of the chairman—that is clearly set out in Amendment No. 38A—in subsection (6), as he rightly points out, the terms and conditions will be determined by the board and not by the Secretary of State. Merely the dismissal or the original appointment would require the Secretary of State's approval. The point about committees and people who are not members of the practitioner panel is identical to the provision on the consumer panel. If there is a fault it is in trying to mirror the consumer panel with the practitioner panel. The noble Lord is quite right and I shall carefully consider the points that he has made.
	We are returning to the whole issue of balance, which is why these detailed clauses are being put forward. If we are to have panels and if the Minister is to utilise the Financial Services Authority as an example, I hope that she might now be able to justify why she and her colleagues have not followed the precedent a little further and why the picture she painted for us earlier is an unfinished painting. Were she to accept these amendments, the painting would be complete. I beg to move.

Lord Campbell of Alloway: My noble friend has just said that there has to be a structure. That is quite right. Without such a structure one can argue the merits one way and the other. That structure must have procedural provisions on the face of the Bill which ensure that the legal profession and the various approved regulators can be heard in reply to what is said by the consumer panel. That is all I am suggesting. I assume this is a probing amendment. If that is right, perhaps some consideration could be given to the structure that should be adopted.

Baroness Ashton of Upholland: The FSA is a front-line regulator, so there is no opportunity for representations to be made from regulatory bodies as there are none. Although I use the analogy in the context of the consumer panel, that does not run all the way through what I have said.

Baroness Ashton of Upholland: It is the example the Minister provided in the context of a consumer panel and only a consumer panel. I did not take it much further. But we are quibbling.
	The noble Lord knows well that in setting up a new regulatory framework there are examples to which one looks as good models from which to borrow. You do not necessarily buy them wholesale because the purposes of a new regulation will be different. That is all I am saying. Therefore, although in one set of circumstances it may be appropriate to go further, it is not in another.
	I was taken with the question of balance. It reminds me of a Moody Blues album I have from the 1970s and I am now merrily listening to it in my head. My worry was that, having been generous in my sudden acceptance of the principle, we have shifted from what I consider to be balance to what other noble Lords consider balance to be. I want to be clear that I can shift it back a bit.
	We have moved from my acceptance of the principle that within the legislation we are trying to address the balance as set out in Amendment No. 38 to saying that despite what I have already said—and I stand by that—there are several points in the legislation at which it is essential the Legal Services Board listens to, takes account of or deals with issues that will be raised by the regulatory bodies and the professionals—the practitioners, if you like—and that nowhere other than Clauses 8 to 11 do consumers get that kind of look-in. That is my balance and in accepting the principle I was saying that we must frame the provision to ensure that it is absolutely understood. However, the argument has shifted from that to being, "Ah, well, we'll have that; and we'll have a practitioner panel, the lawyer as a chair and we can go on some way further".
	Like it or not, one of the issues underpinning the regulatory framework is consumer confidence; ensuring that we get the balance right between good regulation involving the interests of the profession set out by the noble Lord, Lord Maclennan, in terms of expertise—often its members can be more radical in terms of the future and so forth—and saying that the consumers must get a look-in. Consumers have to be taken account of. You cannot ignore them; you have to take note of them. I accept the principle of that balance and the principle behind what the noble Lord, Lord Kingsland, seeks to do. However, we are now moving the argument further down the track.
	We believe that the structure of that is partly borne out by the nature of the relationship between the frontline regulators and the Legal Services Board. I have noted the point about smaller organisations or groups of practitioners and the need to consider them. If we were to enshrine in the legislation a provision along the lines of that described by the noble Lord, Lord Kingsland, the board needs to think about whether it already has that relationship set up with the Law Society and the Bar Council. They may not wish to have a separate body, but do they need to think about ensuring that other bodies get a look-in? That is the way I seek to look at the proposal.
	I would therefore offer a caution. There is a principle that says that the views of the professions, through the regulatory bodies to the Legal Services Board, need to be taken into account. That thread runs through this Bill. However, this is the only place where the consumers get a look-in and this is the only way of providing that and setting up a structure that offers coherence. The balance exists and the issue raised in Amendment No. 38, which I will take away and consider in principle, is the way of enshrining that so that when the Legal Services Board functions it thinks about what it ought to do to ensure that that happens in reality. For that reason, I would resist the amendment.

Baroness Ashton of Upholland: I agree with what the noble Lord, Lord Maclennan of Rogart, seeks to achieve. There is within Amendment No. 38 the principle that you would have to behave. It is all in Latin, so I am already at a disadvantage because my O-level Latin and I are long time apart. I have agreed to take the amendment away in principle, which means I shall come back to the House on Report. That may be an appropriate time for me to spell out what would address the point.

Lord Kingsland: This amendment raises an issue in stark contrast to the matters we have debated for the past three quarters of an hour or so. It concerns will writing. Its substance was another recommendation of the Joint Committee that was rejected by the Government. The Government's view is that once the Legal Services Board is established, it will have the power to determine whether will writing should be brought under its regulatory control. However, the Government have already shown—for example, in claims management—their willingness to regulate in new areas if there is a convincing public need to do so. In our submission, they would be wrong to abandon this approach and leave it to the Legal Services Board to respond, for the sake of illustration, to some major scandal in the area of will writing that might occur at a future date. Our view is that the absence of regulation of will-writing combined with the fact that a defect in a will is normally identified only when it is too late to do anything about it provide a particularly strong need for regulation in this sector. There is a strong case for will-writing to be brought within the regime now, especially as it often requires a lot of tax advice and specialist knowledge.
	In short, we urge the Government to follow the Joint Committee's recommendation. We remind the Government that they were perfectly well able to get round the hurdles in relation claims management in the Compensation Bill, and we see no reason why they should not get around similar hurdles—if, indeed, the Government perceives that there are such—in relation to this Bill. I beg to move.

Viscount Bledisloe: I am very puzzled by the Government's attitude to wills. If one looks at paragraph 5 of Schedule 2, one finds that "reserved instrument activities" means preparing any instrument for transferring land and that "instrument" includes a contract for the sale or disposition of land, except a will. Why a disposition of land by me during my lifetime isa reserved instrument activity that has to be done by a qualified person but a disposition of land by me in my will is something that I can do without having my hand held is something that does not immediately commend itself to me as lucidly logical.

Lord Hunt of Wirral: I am very grateful to the Minister for her response. It is clearly necessary that a more detailed investigation into consumer detriment takes place. In the Joint Select Committee, Mr Eddie Ryan of Co-operative Legal Services told us that he singled out will-writing and probate as items which should become restricted services. The AA also gave us evidence to that effect.
	Clearly, more evidence needs to be accumulated. If I might return to this subject at a later stage, I will do a little more investigation on what evidence currently is in existence to underpin the arguments I have put forward. In the mean time, I seek leave to withdraw the amendment—sorry, I apologise.

Lord Kingsland: Indeed, as chairman of the Joint Committee my noble friend knows more about the substance of the amendment than I do. The Joint Committee's recommendation was quite firm that will-writing should now be brought within the purview of the Bill. The Joint Committee clearly had evidence to that effect before it. The Government are contesting the strength of that evidence, as I understand it. I hope that between now and the Report stage—I yield to the Minister.

Lord Thomas of Gresford: moved AmendmentNo. 41:
	Schedule 3, page 125, line 24, leave out paragraphs (b)and (c)

Baroness Ashton of Upholland: I am very grateful, and I will of course check that. I will also check the point made by the noble and learned Baroness about reserved family proceedings. I will not try to pretend that I can answer it, as that would be extremely foolish on my part.
	I am grateful to the noble Lord, Lord Thomas of Gresford. It is a joy to see him in his place. I am glad that he has caught up with our discussions on Latin, which have played some role in our discussions. As I said, I have O-level Latin, although that was a very long time ago. Perhaps that is why I am not a lawyer or a judge. However, I am also glad that the noble and learned Lord, Lord Woolf, thought that the common touch was important and got the judges to talk to those of us for whom Latin will never be a language on which we will spend much time.
	The noble Lord, Lord Thomas, will not be surprised to hear that we will deal with all the proposals made by the Delegated Powers and Regulatory Reform Committee. We will do whatever it has asked us to do, as ever. I am extremely grateful to the noble Lord for tabling his amendment, as I wanted to take the opportunity to spell out the provision in greater detail. This will be in Hansard so that the noble Lords, Lord Thomas and Goodhart, and the Members of the Delegated Powers and Regulatory Reform Committee will have the chance to see it and, if appropriate, to comment.
	On the specific drafting of the amendment, paragraph 8(1)(b) allows for the person to cease to be exempt. This is required, as the noble Lord, will know, to enable us to bring people within the regulatory framework in appropriate cases. It might, for example, be necessary to regulate the conduct of someone whose conduct of reserved legal activities is giving rise to concern. This is an important power for ensuring that public confidence in those providing legal services is maintained, and the board can respond when problems arise. The power in paragraph 8(1)(c) may be required to enable the Secretary of State to amend any existing provision made in Schedule 3 in respect of exempt persons. That power is necessary to effect the changes to Schedule 3 where there is a need to modify the provision. For example, the reference to the European Communities (Services of Lawyers) Order 1978 in paragraph 7 may need to be updated when a new order is made. Paragraph 8(1)(c) would allow the Secretary of State in such circumstances to revisit the drafting of the exemption in paragraph 7 to reflect the relevant changes and ensure that the provision is fit for purpose. It is an entirely technical provision, which, I hope noble Lords will accept, is necessarily broad to ensure that any appropriate changes can be made in the future.
	Given the scope of the power, we have ensured that it is exercisable only in accordance with the affirmative resolution procedure, so that there is opportunity for Parliament to consider any provision made. Given how these technical changes would operate, the affirmative procedure would be highly appropriate—I know the limitations in amending which noble Lords worry about.
	Let me further clarify the purposes of the power at Schedule 3(8), in line with the response of the Select Committee on Delegated Powers and Regulatory Reform, as the noble Lord, Lord Thomas of Gresford, has reported. As the committee mentioned in its report, the power to exempt is not without precedent. Section 6(2) of the Compensation Act 2006, for which I was responsible, provides for an order of the Secretary of State to exempt certain persons, or classes of persons, subject to the affirmative resolution procedure.
	The power in paragraph 8(1)(a) of Schedule 3 serves a similar purpose to that in Section 6 of the Compensation Act, in that it provides a mechanism by which specific persons can be exempted, subject to parliamentary oversight.
	As we highlighted in the government response, under the existing regime there are already a number of exempt persons who are able to carry out reserved legal activities by virtue of their office without committing an offence. For instance, officials working for local authorities have limited rights of audiencein specified circumstances; for example, underSection 60 of the County Courts Act 1984. Under the Bill, such persons are exempt under paragraph 1(6) of Schedule 3. Those people represent a low regulatory risk and it would not be appropriate to require them to be regulated by an approved regulator.
	It is also reasonable to assume that there will be similar persons, or classes of persons, who might need to be exempted from regulation in the future where a new reserved service has been brought under the regime.
	I hope that that clarifies further the purpose of exemption clauses, that the noble Lord will be able to reflect on the matter, and that members of the Delegated Powers and Regulatory Reform Committee will also read this.

Lord Hunt of Wirral: I agree with my noble friend. This is a simple amendment. It is a practical measure which will make the process more efficient and cheaper. I am concerned that the board would get clogged up with changes that, while routine, might take time. The amendment would prevent the board from being an unnecessary clog, deliberately or otherwise.
	As my noble friend has pointed out, the amendment would not take away the power that the Government wish to give the Legal Services Board but merely shifts the presumption. It is therefore sensible. It is probably more appropriate that I speak to the other points that I wish to make about Schedule 4 during the debate on the Question whether Schedule 4 shall stand part.

Baroness Ashton of Upholland: I shall just make my point, and then the noble Lord can reasonably interrupt me again. If we followed the route of this amendment in saying that there was an exemption unless otherwise stated, and the Consumer Panel were to identify, as noble Lords have suggested, that there had been a detrimental effect, and that that in turn was seen to have a detrimental effect on the regulatory objectives, the only option to the board would be to use one of the powers given within the Bill. It is much better that alterations are dealt with in dialogue between the board and the frontline regulator before we ever get to the stage that, because they did not discuss it, the only option open to the board is to use its power. That, above anything else, is an issue we should consider very carefully.

Viscount Bledisloe: I venture to suggest that both the Minister and the noble Lord, Lord Thomas of Gresford, have dug themselves into holes because they are determined to consider two opposite poles. One says we must have a negative procedure, the other says we must have a positive one. Surely the right answer is that a regulator who wishes to change his rules shall give notice of the change he intends to the Consumer Panel and to the Lord Chancellor, and if they do not like it, or are doubtful about it, they report it to the Legal Services Board and say, "I think you ought to look at this". If they do not do so, it goes through on the nod if nothing has happened within a month or two. Approval is needed unless someone raises an objection. It is not for the judge of the Legal Services Board to search everyone's case to try and find the objection; it is up to him to deal with objections if they are made. We do want the concept not of "exempt", but of "they are approved unless the Legal Services Board, on the recommendation of the Consumer Panel or the Secretary of State, says that they need looking at".

Baroness Ashton of Upholland: In paragraph 21(1) of Schedule 4, we think we have more or less captured what the noble Viscount is saying. I am equally not in a hole at all, by the way. I am robustly trying tostop noble Lords spending the profession's money, which is what I think would be the conclusion of this approach.

Lord Kingsland: I feel I ought to apologise for tabling this amendment, because it seems to have consumed so much of your Lordships' time when it perhaps might have been better served, not in your Lordships' House, but in your Lordships' Dining Room. Time is moving on.
	This issue is just another example of raising the question of the appropriate role of the Legal Services Board as supervisor, as opposed to direct regulator. It is important, if I may say so, that the Minister bears in mind that the regulator is the approved regulator. There are several different regulators who have rather different regulatory problems to confront. They are the experts. They know all about the regulation.
	The task of the Legal Services Board is simply to ensure that the regulation is done in a way that is satisfactory to all the interests affected by it, not least the consumer interest. That is why the point made by the noble Lord, Lord Thomas of Gresford, is so telling. The issue is not whether or not a particular alteration in regulatory arrangements conforms with what the Legal Services Board thinks is correct, but whether or not the activities of the approved regulator give rise to complaints. If they do not, it is clearly performing its task satisfactorily.
	It is therefore right—to adopt the language of the noble and learned Baroness, Lady Butler-Sloss—that the task of the Legal Services Board here should be not proactive but reactive, if it only intervenes when in some way or other the approved regulators are falling below the standards that are expected. The philosophy here for the Government should surely be, "Trust the approved regulators". That is the philosophy the Minister told us earlier in the day lies behind the Bill, and it is precisely the philosophy that the amendment seeks to advance.
	I am not going to attempt to summarise all the arguments that have been advanced by noble Lords in this debate, except to say that I agree with them all.

Lord Davies of Oldham: My Lords, I shall speak to the three other instruments before us as well. They implement the EU's markets in financial instruments directive. I hope that the House will tolerate my referring to it as MiFID for the rest of my speech.
	MiFID is a cornerstone of the EU's financial services action plan. It regulates the buying and selling of shares, bond derivatives and other financial instruments. Through a mixture of competition between intermediaries and markets and core investor protection rules, MiFID seeks to increase the depth and liquidity of Europe's financial markets.
	This is a directive on which much ink has been spilled. Under lurid headlines such as "Day of the Triffids" and "EU's Monster of Madness", many articles suggested that the directive is an example of inflexible, overburdensome regulation—regulation that will erode London's international competitiveness. I contend that that is not the case. I believe that MiFID demonstrates the value of engaging with Europe on financial services issues. Most of Europe's major financial services firms have a presence in London, and many London-based firms do business across Europe. In these circumstances, it is vital to our interests to have an effective regime for cross-border business in Europe.
	MiFID replaces an existing directive—the investment services directive. The ISD does not provide an effective basis for investment services and activities in the European Community in the21st century. It subjects firms doing cross-border business to multiple regulatory regimes andallows member states to retain anti-competitive arrangements for share trading.
	The Commission was therefore right to seek to replace the ISD. MiFID simplifies the regulatory regimes applying to cross-border business. It opens up share trading in all member states to competition, and we are already seeing benefits from this change; new schemes are proposed such as Project Turquoise, a multilateral trading facility launched by investment banks that will be based in London.
	The controversy over the directive has in large part been focused on its investor protection provisions and its transparency regime for share trading. As Commissioner McCreevy has made clear, developments in these areas were essential to make progress on the passport and competition in securities trading. Member states wanted reassurance that market opening would be balanced by effective protection for investors.
	The Commission has sought to create an investor protection regime that is flexible and proportionate. In several areas, the directive's investor protection rules are less extensive than those that they will replace in the UK. They also afford, as currently in the UK, different levels of protection to different categories of investor. The highest level of protection is reserved for retail investors. The directive also allows member states to retain additional protections where those can be justified against strict criteria. This process was backed by the UK and we will be notifying the Commission that we are retaining a small number of national rules.
	The transparency regime is in the first instance limited to the equity market and the Commission has said that it will be alert to any signs that the changes are having unintended consequences. A review has recently started to consider the extension of the requirements to other markets. The Commission has emphasised that the review is seeking evidence of market failures, and we will work closely with the FSA, firms and the Commission.
	There will be a cost in adjusting to the regulatory regime under the directive. The FSA has put this cost at between £750 million and £1 billion in the United Kingdom. It has also suggested that the directive might bring direct benefits of £200 million a year and indirect benefits of a further £240 million a year.
	I turn to the implementation of the directive in the United Kingdom. Responsibility is split between the Treasury and the Financial Services Authority. Given the structure of financial services regulation in the UK, the FSA will undertake the greater part of the implementation through changes to its handbook. Given the split of responsibilities, we have worked very closely with the FSA on implementation to ensure that the whole hangs together. In addition to formal public consultation, we and the FSA have, since 2005, had meetings with the main trade associations approximately every six weeks, in addition to a host of other meetings with trade associations and firms. Both we and the FSA have tried substantially to mirror the language in the directive to avoid overimplementation.
	The legislation that we are discussing can be split into two parts. The regulated activities order and the exemption amendment order deal with the scope of the implementation of the directive. The main implementing regulations and the Uncertificated Securities (Amendment) Regulations deal with other aspects of the implementation of the directive.
	In respect of the scope of UK regulation, we had extensive discussions on the best approach to revisions to the regulated activities order. The order implements the scope of several directives but largely using language developed domestically rather than taken from directives. We considered integrating language taken from the directive into the substantive articles of the order. However, much in the current regulatory regime, including fees, hangs off the order's current structure. We therefore decided to opt for an approach that keeps the current structure largely intact to minimise the disruption for firms.
	Within this minimalist approach, the amendments to the order do three main things: they indicate more clearly where exclusions from UK regulation can be over-ridden by MiFID; they introduce a new activity of operating a multilateral trading facility, or MTF; and they expand the coverage of financial instruments caught by regulation.
	MTFs are already regulated in the UK by virtue of Article 25 of the regulated activities order, which covers arranging deals in investments. However, the activity was included in MiFID because of previous arguments between member states about whether this activity was caught by European regulation. We therefore felt, and industry largely agreed, that the clarity in MiFID should be copied across to domestic legislation.
	MiFID covers a slightly wider range of derivatives than are currently caught under UK regulation. In particular, it covers a wider range of options, principally physically settled options on commodities, and a wider range of credit derivatives. Changes are therefore needed to the scope of derivatives caught by the articles of the RAO dealing with options, futures and contracts for difference.
	Some concern has been expressed that the implementation of the directive might bring foreign exchange forwards into the scope of the RAO. We have been in contact with the Foreign Exchange Joint Standing Committee. Our view is that MiFID does not alter the current test for determining whether such instruments are inside or outside the regulated activities order.
	The main implementing regulations cover a wide variety of issues in just over 30 pages of legislation, but, despite the length, they do not fundamentally remake the UK's regulatory regime under FSMA. They essentially amplify existing requirements.
	The issues that I have highlighted in this contribution illustrate two broad points: the efforts that we are making to implement this in a practical and proportionate manner; and the fact that the directive is more liberalising and flexible than it is often given credit for in the UK. Creating a truly integrated market for financial services in Europe depends on more than legislation, but legislation is necessary to provide a framework to facilitate integration by breaking down national barriers. MiFID breaks down barriers and promotes competition. Accordingly, I commend the order to the House. I beg to move.

Baroness Noakes: My Lords, I am grateful to the noble Lord, Lord Davies of Oldham, for his comprehensive introduction to the orders before us this evening. I wish that I could give such a warm welcome to the orders themselves.
	I expect that all those years ago in Lisbon the Government thought that going along with the EU Council as good Europeans was a good idea when they approved the financial services action plan. It seemed like a good idea to create a single European market in financial services, as that would provide wider and deeper capital markets, which would in turn benefit businesses and individuals with better-value sources of finance. But that terrific idea has turned into a monster comprising 17 directives at a cost to the UK of anything up to £24 billion over the next three years to 2010—the magical date forthe implementation of the Lisbon agenda. The cost to the whole of the EU will be around three times that figure.
	The UK has easily the most successful and sophisticated financial market in the EU. From a consumer protection perspective, it is hard to see why the cost bears so heavily on the UK. That cost will not help the UK to remain one of the two big players on the global financial stage. The FSAP is focused on intra-European issues, which may be fine for most of Europe's financial markets, but the only real global payer in the EU is London and the FSAP does nothing to help London to succeed in global financial markets.
	The financial services action plan may well go down in the financial history of this country, if not the whole of Europe, as a costly mistake, but we are not here to debate the FSAP. We are here to concentrate on MiFID, as we are allowed to call the directive this evening, which is being implemented by the orders before us and some other negative instruments.
	It is perhaps no surprise that our general view is not quite on all fours with that expounded by the Minister. The most that we can say is that these orders make the best of a bad job. The history of the passage of MiFID through Europe is a lesson in itself. The original requirements as contained in a second investment services directive were deregulatory, but they were defeated by an unholy alliance of France, Italy and Germany protecting their own investment exchanges. An ambush in ECOFIN in 2003 with an inexperienced Treasury Minister representing the UK resulted in the pass being sold. How often have we heard of that toxic combination—three countries at the heart of the European project protecting powerful vested interests at home up against a UK that did not have its full firing power in action? Perhaps even more appalling is that the final formal adoption of MiFID took place in 2004 at an Agriculture and Fisheries Council, which could not pretend a competence in the extraordinarily complex issues lying behind the directive.
	The Minister who let us down at ECOFIN, who is no longer in Parliament, said at the end of the meeting that the result was,
	"misguided and profoundly anti-competitive".
	At the same stage, Sir Callum McCarthy, chairman of the FSA, called it a,
	"bad result for Europe and an unattractive result for the UK".
	In practice, some of the worst aspects of that directive have been mitigated through the subsequent processes in the European Parliament and by the Committee of European Securities Regulators, but this end result is not the finest hour for Europe and it is certainly not the finest hour for the UK's financial services industry. The processes of European Union rule-making leave much to be desired, but our financial services industry has demonstrated its qualities of pragmatism and adaptability. The industry has concentrated on working with the Government and the FSA on practical implementation approaches that minimise any potential harm from MiFID. I acknowledge that the Treasury and the FSA have consulted extensively and have made changes in response. The views that we have received from many different parts of our financial services industry have been unanimous on the constructive way in which the Treasury and the FSA have approached their tasks. But let us not pretend that the financial services industry was doing any more than making the best of a bad job.
	We can see how bad a job is involved by looking at the costs and benefits. Even the regulatory impact assessment concluded at paragraph 33 that,
	"the one-off cost of implementation significantly exceeds the expected ongoing benefits".
	There are very wide estimates of costs and benefits contained in the RIA—the Minister cited some figures this evening, but the FSA calculates implementation costs in the range of £0.9 billion to £1.2 billion with ongoing costs of £100 million. The direct benefits are said to be around £200 millionper annum. No business in this country would contemplate an investment on the basis of those metrics. Many of the costs bear disproportionately on the smaller end of the industry, such as independent financial advisers, who believe that the costs will not produce any tangible benefits for consumers or for the firms concerned. One of the problems is that many of the costs remain unclear because the precise nature of implementation remains unclear—an example here is the nature and scope of investment managers' transaction reporting obligations. MiFID is yet another example of European regulatory burdens being imposed by a Government who have not put the UK's interests first.
	The Government are desperately keen to get this order through this week so that the FSA can issue yet more rules within the deadline of 31 January for transposing the directive, but I hope that the Minister will explain to the House where we sit in the context of other EU countries. I have been told that the only other country in the EU that is ready to transpose the directive by 31 January is Bulgaria, but I expect that that is common title-tattle. When will France be transposing the directive? What about Germany, Italy, Spain and the other countries that claim some significance for their financial services industries?
	I should also mention the status of cross-border business. I am sure that the Minister has read the consultation documents from the Committee of European Securities Regulators on the implementation of MiFID. Regulators always come in for their fair share of criticism, but committees of regulators who are not accountable to anyone are even worse. But in this case CESR has produced some good analysis of the passport proposals. Its report published last month shows the very real difficulties that exist under the MiFID proposals for home and host regulators. The MiFID proposals envisage that a host regulator regulates "conduct of business" requirements of a branch, while the home regulator concentrates on "organisational and control matters". As the Minister will know, such a distinction is not one that exists in a pure form in the real world and hence it requires a very high degree of co-operation between the various regulators to ensure that there is a seamless approach to regulation.
	Let us take the example of a branch of a company based in country A that operates in country B but also trades, without having a branch, with the citizens of country C. The various regulators will have to make sure not only that country A and country B regulators do not overlap with each other or leave regulatory gaps but also that the activities in country C are covered, presumably by the regulator of country A, since country B's regulators will have no locus. This is not about administrative protocols; at heart, it is an issue of consumer protection.
	Is the Minister happy that the access to comparable consumer redress arrangements will exist throughout Europe before firms start to trade throughout Europe on the basis of MiFID? We are rightly proud of our consumer arrangements for complaints and compensation. Can the Minister assure the House that if a Polish financial services business, for example, has a branch in Denmark through which it trades with UK consumers, our consumers will have redress arrangements comparable to those that exist for wholly UK business? If the Minister cannot answer that question strongly in the affirmative, will he explain on what basis the Government consider it appropriate that these orders should be approved?
	I understand that CESR is still issuing consultation papers on various issues, which means that some issues will be resolved after the FSA has issued its rules. This in turn means that there remains significant uncertainty for UK firms that want to proceed with detailed implementation so as to be ready for the November 2007 implementation date. Will the Minister say something about those remaining issues and how the Government expect the FSA to deal with the possibility that the goalposts will be moved before we reach implementation?
	Lastly, the Minister will be aware that the scale of MiFID implementation will stretch the resources of all financial services firms, both big and small, not only for the rest of this year but for some time to come. There simply is not the capacity to cope with any more regulatory requirements other than those that are absolutely essential. Will the Minister confirm that the Treasury and the FSA are fully aware of this and committed to giving the industry a proper breathing space to absorb MiFID, and that, if necessary, they will stand up to Europe on further regulatory burdens in this area?

Lord Davies of Oldham: I am grateful to the noble Baroness and to the noble Lord for speaking in the debate. The indulgence which the noble Lord, Lord Newby, extended to me was quite unnecessary and even ill placed. There was never a hope that I would get the same indulgence from the noble Baroness, Lady Noakes. The noble Lord might as well have been as critical as he wished because I was certainly going to be tested on my defence of the regulations by the noble Baroness. I thank her through gritted teeth for her contribution.
	I heard what the noble Baroness said about our recent history on Europe and the development of MiFID. Her interpretation of history reflected a general party position which is somewhat distant from things European. Some members of her party still have reservations about progress towards a single market, of which this measure is a significant contribution. Her interpretation of recent history is in sharp contrast to that of the noble Lord, Lord Newby. His party thinks very differently about the benefits of Europe. Between the Scylla of being hostile to Europe and the Charybdis of being over enamoured of Europe the Government pursue a steady course between two such dangers and emerge into the safety of what we propose on the implementation of MiFID.
	I hear what the noble Baroness says. She is absolutely right that we anticipate only relatively minor players being involved, if I can describe Bulgaria and Romania as minor players in financial markets. We expect them to sign up on the same date as we do. The noble Baroness is right that there are indications that France, Germany, Italy and Spain may sign up a little later in the year. Is that a disadvantage to London and the United Kingdom? I think not. We will be able to take advantage of the already greatly advanced dominant position which London enjoys in the capital markets of Europe. We will be able to exploit that situation. However, I recognise that it is entirely right that we should give satisfactory assurances on the queries which the noble Baroness raised on some of these issues.
	On the timing issue, as the noble Lord, Lord Newby, said, it does the reputation of this country nothing but good that we should seek to sign up to the implementation of the directive on the designated date. It will also give a very clear indication and steer to all British firms on what adjustments have to be made. We have been in extensive consultation with them. I hear what the noble Baroness says—that there are reservations about certain parts of the directive. However, she will recognise that we have been in substantial consultation with the industry in the lead-up to this position. We can see no advantage—we have not been lobbied intensively by the industry as a whole—in being tardy in signing up to the directive. However, the industry has sought assurances on certain aspects of the operation of the directive.
	The noble Baroness put forward the major premise that the Government had not driven a hard enough bargain in Europe during the negotiations. I put aside the rather trivial point about the fact that a meeting of agriculture Ministers signed up to the measure. That is true but it was merely a question of procedure. The agriculture Ministers had a very clear note from the Treasury explaining exactly what the British position and that of the rest of Europe was. It was merely the sanctioning day. I do not think that anything can be read into the fact that the final signing of the directive took place at an agriculture committee meeting. However, I should emphasise what the directive does and what we achieved in our negotiating position. We have achieved an improved passporting regime and effective competition between execution venues. We have aided the liberalisation of the means of trade and transaction reporting and advanced principles based on implementing the measures. Behind all this is the great strength of London and the United Kingdom in this area, which we brought to bear in the negotiations.
	I recognise that the noble Baroness expressed anxieties. She asked whether the cost-benefit analysis stood up. At this stage, certain aspects of cost-benefit analysis are open to challenge. That goes without saying. That applies to the noble Baroness's figures even more than to mine. I scarcely recognise the figure of £24 billion of costs that she produced.

Baroness Noakes: The figure of £24 billion related to the whole of the financial services action plan in the period to 2010. That is not even the whole of the total cost. It is not the cost related to MiFID, which fortunately is of a slightly lower order.

Lord Davies of Oldham: I am grateful to the noble Baroness for clarifying that issue. I had forgotten that we had ranged over such an extensive history and had made such a projection forward to 2010 that I had to adjust my figures as I was concentrating on the orders before us. The House will forgive me if I made that mistake.
	The noble Baroness asked about security for investors. This anxiety about the small independent financial adviser is ill placed. If the small independent financial advisers are not covered by this directive, and although anxieties might be expressed about what might develop in the future, we will cross that bridge when we come to it. They are not covered by the directive. I therefore do not think that I have anything in particular to say about that.
	There was a question about whether we succeeded in keeping gold-plating at bay. The Treasury and the FSA are making only very limited additions to the directive where there is a very clear-cut case of advantage to the United Kingdom citizen. The FSA rules will be produced this week and the truth of what I am saying can be examined then by noble Lords opposite. We are conscious that we do not want to add to this directive save in so far as we have clear instances where we can give benefits to the people of the United Kingdom in the extra security which we already have in place and which we have signalled to the Commission we intend to sustain. That is a long way from selling the British people short on the development of this directive. As the noble Baroness was kind enough to recognise, the directive forms a key part of the FSAP and represents a step towards the objective of an integrated European capital market. It will reduce the cost of capital and facilitate enhanced growth and employment. Why should we not welcome the development of this initiative, knowing full well that we have a financial industry that is best placed to take advantage of these circumstances?
	MiFID is also an important test of the new Lamfalussy approach to European legislation. The efforts that the CESR, the Commission and national authorities have put into delivering the necessary clarity at level 3 are to be applauded, as is the work of the trade associations in producing their own guidance, for example, via MiFID Connect.
	The four pieces of legislation that we are considering today represent the backbone of the Treasury's responsibility as regards transposition, with the majority of the work being done by the FSA by their rules. That is why the noble Lord, Lord Newby, is right to emphasise how important it is to see how the FSA intends to square up to its obligations, which will become clear by the end of this month.
	Significant attention has been given to the cost of implementation. We have done our bit to help minimise this by working closely with firms throughout the process. The noble Baroness was kind enough to recognise that substantial consultation has gone on in the development of this work, limiting the changes to the current structure and introducing saving transitionals to ease the move from ISD to MiFID. There is a cost to this transition; that goes without saying. As I have indicated by the figures that I quoted in my opening statement, the costs are not insubstantial. Nevertheless, the benefits are not insubstantial either, and we are well placed to reap those benefits.
	The legislation and the MiFID regime are an important step towards a truly integrated market for financial services in Europe. MiFID breaks down barriers and promotes competition. As the House will recognise, we in this country have been praised for the competitiveness and openness of our financial services and the market that we operate. We take pride in that position, and we recognise that, worldwide, London has great pre-eminence in these terms. There is absolutely nothing for us to fear from MiFID; rather there are opportunities that we should seize.

Moved, That the draft order laid before the House on 18 December 2006 be approved. 5th Report from the Statutory Instruments Committee and 6th Report from the Merits Committee.—(Lord Davies of Oldham.)
	On Question, Motion agreed to.

Moved, That the draft regulations laid before the House on 18 December 2006 be approved. 5th Report from the Statutory Instruments Committee and 6th Report from the Merits Committee.—(Lord Davies of Oldham.)
	On Question, Motion agreed to.

Moved, That the draft regulations laid before the House on 18 December 2006 be approved. 5th Report from the Statutory Instruments Committee and6th Report from the Merits Committee.—(Lord Davies of Oldham.)
	On Question, Motion agreed to.

Baroness Ashton of Upholland: I am grateful to the noble Lord. With regard to Schedule 4, I know that the Association of Law Costs Draftsmen Ltd, which is currently going through the Courts and Legal Services Act procedure, has expressed interest in regulating probate, as has the Council for Licensed Conveyancers. There may be others, but those are the two that I know of. I do not have an estimate ofthe number of likely applications, but I shall consult the department and write to the noble Lord about that. However, the two bodies that I have mentioned are good examples of the kind of organisation that may well take part in this work.
	I referred to the position in Scotland when we discussed that part of the Bill, and I responded to points raised by, I believe, the noble Baroness, Lady Carnegy of Lour, who almost inevitably raises issues concerning Scotland. The noble Lord is right to point out that the position there is different.
	I said that I will think very carefully about the question of independence. I think that I also said that my noble and learned friend, in particular, felt that the relationship with the Lord Chief Justice—although he may well wish to consult him, he did not wish to see that process in the Bill—was clear and consistent with government policy, and I do not envisage a change in that. But I said that I would look at the question of independence in that context and I shall do so. I hope that that gives the noble Lord the answers that he seeks.

Baroness Ashton of Upholland: I hope that I can give the noble Lord the assurance he seeks. Clause 29 reflects the recommendations of the Joint Committee. Those are that the Bill should require regulators to separate fully their regulatory and representative functions; that the separation should require all regulatory decisions to be taken by an independent regulatory arm; that arrangements must be made to ensure that the regulatory arm has the resources it reasonably requires; and that it should be required to seek the intervention of the Legal Services Board if it feels that any action or inaction on the part of the relevant professional body is damaging to its independence or effectiveness.
	The Joint Committee said that it would help to ensure that the Legal Services Board acts proportionately if approved regulators separate fully and transparently their regulatory representative functions. That would mean that there would be a high level of public confidence and less reason for the LSB to intervene. I completely agree with that. In line with the model that we have adopted, we think it is appropriate for the approved regulators, following the board's internal governance rules, to organise themselves in such way as they see fit in order to achieve that. If the board is not satisfied that the regulatory functions of an approved regulator have been separated from its representative functions, it is able to direct the approved regulator to take sufficient action to achieve that. I hope that clearly sets out the Government's position. We do not wish to put further considerations on the face of the Bill, but I hope that answers the noble Lord's point.

Lord Hunt of Wirral: I am grateful to my noble friend for moving this amendment. I thank the Minister for paying tribute to the recommendation of the Joint Committee. I will try to square the circle here. Although I agreed with my noble friend that the issue has to be proportionate, we considered it very carefully in the Joint Committee, and took evidence from the existing regulators.
	The Bar Council and the Law Society told us that they had already taken steps to meet Sir David Clementi's recommendation that there should be a separation between the regulatory and the representative elements of their work. ILEX indicated that it accepted the need for a separation and would complete the process of splitting its regulatory and representative functions by the end of last year. CIPA and ITMA said that they could implement such a split if required to do so. I refer to question 228 and the answers given by Dr Harrison and Philip Harris. We were told that the notarial profession already distinguishes between regulatory and representative functions, and the issue did not arise for the CLC, which is a purely regulatory body with no representative functions. That is why we concluded that the draft Bill should be amended to require approved regulators to separate fully their regulatory and representative functions.
	I have to say that we did not receive any evidence that Chinese walls or some similar procedure was necessary with some of the smaller regulators; rather the contrary. We received reassurance that they were perfectly able to implement the split. Therefore, I feel slightly confused as to why this evidence has arisen now that separation is not complete, particularly as we spent some considerable time in the Joint Committee considering the position before we reached our conclusion.

Baroness Ashton of Upholland: I am hopeful that I can clarify where we are on this question. I agree completely that proportionality is very important and that the board must have regard to it when exercising its functions under Clauses 28 and 29. We believe that that is covered under the duty in Clause 3, which states:
	"The Board must have regard to ... the principles under which regulatory activities",
	including its functions under Clauses 28 and 29 should be proportionate. I do not, therefore, want to set out an additional requirement for the board to pay particular regard to what is proportionate under Clauses 28 and 29, as it rather gives the appearance that it does not have to do so when discharging all its functions or that the tests for other functions should be of less significance. That would not be desirable.
	As regards the proposed new subsection, I agree with the noble Lord, Lord Kingsland, that there might be instances when it may be more efficient and cost effective for approved regulators to operate from the same premises, where the overheads can be shared between the regulatory and representative arms, or for some individuals to carry out functions that could have both regulatory and representative aspects—for example, if those individuals are carrying out support rather than policy or decision-making roles. However, there may be circumstances where it is appropriate to make such a requirement, and it is right that the board should be able to describe this without being constrained by considerations set out in legislation.
	I recognise that the amendment states that the requirement is without prejudice to proportionality. However, given that the board is already under this duty, and it must ensure that the regulatory and representative functions are appropriately separated, I do not think that we need to put the additional detail in the Bill.
	I hope to allay concerns, in a sense, in both directions, that the detail is better set out in the internal governance rules under Clause 29, which allow the board to take a proportionate approach. So, yes, separation, but that does not necessarily always mean separate buildings; indeed, there may be specific circumstances where individuals can carry out particular functions. I do not think that there is any difference between us. That is how we see it working.

Lord Kingsland: In moving AmendmentNo. 47, I shall speak to Amendments Nos. 48, 50, 51, 54, 55, 59, 60, 67, 68, 76 and 77. The amendments would ensure that the various powers of intervention of the Legal Services Board in the regulatory work of approved regulators are triggered only by an adverse impact on the regulatory objectives as a whole. Under the Bill, the board's disciplinary measures could be enforced on the basis of an adverse impact on only one of the regulatory objectives.
	The Joint Committee agreed that it was important for the Legal Services Board to have these formal powers and that it should have several effective measures at its disposal to exercise them. However, it also regarded it as essential that these powers are used only when necessary, when the approved regulators are clearly failing, and that in normal circumstances there would be no threat of an over-intrusive board micromanaging the approved regulators.
	The amendments are consistent both with the Government's response to the Joint Committee that the Legal Services Board should act only where there is clear evidence of failure on the part of an approved regulator, and with the policy that the lead responsibility should rest with the approved regulator—themes which have already been rehearsed in debates on several amendments this afternoon and earlier this evening.
	The committee advised that differences should be resolved by agreement in as many cases as possible by making the threshold for intervention by the Legal Services Board higher than it is in the Bill. It is hoped that the amendments would lead to agreement in more instances than otherwise, and would discourage the board from acting in an excessively heavy-handed manner.
	The reference point for the failure of an approved regulator will obviously now be the regulatory objectives established in the Bill. The inevitable difficulty is that the objectives themselves will often conflict. Training prior to qualification may have an adverse impact, for example, on competition in legal services, while its absence might have an adverse impact on consumer interests.
	The regulatory objectives should be taken as a whole. Almost any exercise of its functions by an approved regulator will lead to some adverse impact on at least one of the regulatory objectives. If the threshold for intervention were too low, the Legal Services Board would become a front-line regulator flying in the face of its supervisory role. The potential for constant interference by the board would go completely against the Clementi vision of the LSB as a small oversight body.
	If the LSB is allowed to depart from its supervisory role—and it is to the Act that it will refer, not any Joint Committee recommendation or government response—it will also drive up costs. The board must be allowed to take a balancing approach before intervening against the approved regulators by assessing whether the act or omission has had a detrimental effect on the regulatory objectives as a whole.
	The amendment does not impose an artificial threshold by specifying the number of objectives that must be affected before the board can act. It would still be open to the Legal Services Board to punish an approved regulator for breaching only one of the regulatory objectives, as long as that was sufficiently serious to have an adverse impact on the objectives taken together. These amendments would ensure that the board does not look at each objective in isolation but considers the wider and effective application of the objectives laid out in Clause 1, which we are sure the Government would like to see. I beg to move.

Lord Hunt of Wirral: I agree with my noble and learned friend Lord Lyell. Until the intervention of the noble Lord, Lord Whitty, we had been getting on exceedingly well. I do not know why he felt it right to throw abuse at the Law Society in the way that he did, but I completely disagree. He is just being a little over anxious. No doubt he has heavy responsibilities as chair of the National Consumer Council, but in this group of amendments we are just trying to get the balance right. I agree with my noble and learned friend that the triggers for the Legal Services Board exercising its formal powers in respect of the approved regulators just need to be balanced in some way.
	I recall that the Government said in response to the Joint Committee's report that the Legal Services Board should act in partnership with the approved regulators, exercising its formal powers only when approved regulators are clearly failing. The question of whether a regulator is failing naturally needs to be looked at by reference to the regulatory objectives. The noble and learned Baroness, Lady Butler-Sloss, is right. We must make sure that the current formulation is narrowed to some extent. It is just too wide and could be misleading in many ways.
	The problem is that the regulatory objectives are to some degree in contention with one another. Almost any act or omission can be regarded as having an adverse impact on at least one of the regulatory objectives. I give as an example the requirement to undertake prescribed training prior to admission as a solicitor. It would plainly have an adverse effect on competition in legal services if everyone with a law degree could simply be admitted as a solicitor immediately. The potential supply of solicitors would be that much greater. On the other hand, failing to require appropriate pre-admission training would have a detrimental effect on the interests of consumers, and probably on one or two of the other regulatory objectives. Under the current formulation in the Bill, the Legal Services Board would be entitled to take action against an approved regulator whatever approach it took to pre-admission training. So I think that my noble friend's amendment is well placed.
	I can assure the noble Lord, Lord Whitty, that the decision on whether to take action in any particular case must be for the Legal Services Board. It is not possible to prescribe detailed quasi-mathematical criteria for the exercise of the power. We are going to have to rely on the judgment of the Legal Services Board, subject to whatever arrangements for challenge exist in a particular case. But it is important for the statute to guide the board appropriately on the approach that it should take, and in this context the board needs to take a balancing approach. It needs to decide whether the act or omission has had an adverse impact on the regulatory objectives considered as a whole. That does not mean that the Legal Services Board can act only where a failing of the approved regulator affects more than one regulatory objective; it could still deal with it on one objective. An act or omission which adversely affected competition, for example, without being justifiable by reference to one or more of the other objectives would be sufficient to justify action taken by the Legal Services Board.
	It is important that a balancing exercise is carried out so that the board does not intervene where an act or omission constrains competition, but there are sound reasons in the other objectives for the approach which the approved regulator has taken. I support my noble friend's amendment because he is establishing that principle.

Lord Brennan: The first four parts of the Bill deal with two important features relating to the independence of the legal profession. The first is appointment to the Legal Services Board and its structure, and the second is the board's enforcement powers to intervene. We are concerned with the second of those features. I sympathise with the intent of this group of amendments, but I doubt their effectiveness. The phrase "taken as a whole" does not raise a threshold; it fudges it. It introduces a legal state of affairs in which seven objectives, one of which has a subset of four principles, can all be looked at as a whole. That is an extremely difficult intellectual task and one which, rather than creating a sensible threshold, in my view works to the opposite effect. The next amendments, referring to "one or more of" and inserting an adjective before "adverse", could serve to be far more effective.

Baroness Ashton of Upholland: I apologise to my noble friend Lord Brennan for not seeing him seeking to speak; I did not know he was behind me.
	It is a delight to see my noble friend Lord Whitty. I say that because, as noble Lords will be aware, there are a lot of lawyers in the Committee, and there have been two or three references to the lay chair and lay members. I wanted specifically to note the presence of my noble friend because it is a good reminder to us of the strength of feeling of consumer organisations and individuals over this legislation. Whether noble Lords agree with what my noble friend said or not, it is right and proper that we should hear those voices. In discussing this legislation outside your Lordships' House, I have heard these voices on several occasions. They have been far more concerned than anything that my noble friend has said might suggest.
	I hope that I can allay some of the concerns raised. I do not dispute the need for the Legal Services Board to think about the regulatory objectives as a whole when it carries out its regulatory functions and considers exercising its powers. Indeed, the Government have consistently set out the policy that the board should be able to judge the relative importance of each regulatory objective. This would allow the board to balance the impact that actions or omissions may have on the objectives and to consider the overall effect. That is consistent with the approach taken by Sir David Clementi in his review of the regulatory framework in England and Wales.
	However, it is important that the board is not restricted in acting where only one of the regulatory objectives has been adversely impacted, if it is appropriate for it to do so. To put it another way, the Legal Services Board will have to consider to what extent there has been an impact on each one of the regulatory objectives and then take its final decision on whether to take regulatory action in the round. In such a case, it must be free to act where, after careful consideration, it judges that there has been an impact on only one of the regulatory objectives but that that impact is sufficient to warrant the taking of some form of regulatory action.
	I am therefore concerned that the amendments would prevent the board from being able to take appropriate action where there has been a detrimental effect on only one of the regulatory objectives. An example might be where a regulator has not put in place arrangements to increase public understanding of citizens' legal rights and duties, even where the board has sought to achieve that through dialogue. It would be appropriate for the Legal Services Board to act if dialogue had failed to resolve the issue. Currently, the board can exercise a power if there has been an adverse effect on one or more regulatory objectives, provided that a number of safeguards have been satisfied. Those safeguards include the requirement for the board to be satisfied that, in all the circumstances of the case, it is appropriate to take that course of action, and a right of approved regulators to make representations.
	It is worth repeating that, under Clause 3, the board must have regard to the principles under which regulatory activities should be transparent, accountable, proportionate, consistent and targeted only at cases where action is necessary. Those are important safeguards, and I hope that noble Lords will reflect on them. So there is, of course, the principle of looking in the round, but that is not to say that there will never be circumstances where the impact of failure to deal with one regulatory objective is such that the Legal Services Board should take action. That is the right way to pursue this, and I hope that the noble Lord will feel able to withdraw his amendment.

Lord Kingsland: I am of course extremely grateful to the noble Baroness for her response, but surprised to hear her approach to the interpretation of Clause 1. As I understand it, the Government have not sought to differentiate in weight between any of the considerations set out in Clause 1(1); they all have equal weight. That is the Government's position, and there is nothing in Clause 1 to indicate that any differentiation applies.
	If that is so, I suggest that simply focusing on one of those objectives would be tantamount to acting in an arbitrary fashion. Under Clause 30, since an adverse impact on just one of these objectives is sufficient to have a triggering effect, what is to prevent the LSB simply extracting one of those seven and, without looking at any of the other six, deciding that an adverse impact is justified and intervening? In my submission, that would be a wholly improper way for the LSB to act, simply by virtue of the way in which Clause 1(1) is drafted, yet that is what Clause 29 entitles it to do.
	When considering action under Clause 29, the proper approach of the board has to be to analyse each one of the seven objectives before it acts. If that is the obligation on the LSB, it must, as a consequence of analysing each one, then engage in a balancing exercise—it must ineluctably follow—and, as a result of that exercise, come to a conclusion.
	In the light of the structure of Clause 1(1) and the way in which the Government have told the Committee that they interpret it, there is a conflict in the Bill between Clauses 1(1) and 29. In my submission, the Legal Services Board has no choice; it has to go through the procedure that is laid down in our amendment.
	The noble Baroness is looking uncharacteristically perplexed. She may or may not want to intervene again. I see that she does—I yield to the noble Baroness.

Baroness Ashton of Upholland: I am interested in what the noble Lord is saying. I hope that he accepts the premise that even when looking in the round, there are circumstances where the failure in one of the regulatory objectives is such that the Legal Services Board should act. I think that he does. If so, there is little between us, as the noble and learned Lord, Lord Lyell, said. I think that we have done that and Members of the Committee think that we have not, so I am happy to try and ensure that we have done what we set out to do.
	To return to what my noble friend Lord Whitty said, it is important that we do not water down by accident—which I know is not what the noble Lord, Lord Kingsland, is seeking—what is arguably the most important aspect of the Legal Services Board. If you fail to provide proper access to justice, that can, on its own, trigger action—if you fail to do something and that is quite clear even when it is looked at inthe round. We must not lose that. However, the Government's position is that we want to ensure that we look in the round. We think that we have achieved that. If Committee Members feel that we have not, I am happy to look at it again. However, it will be in the context of thinking that we are already there, so I am not promising to do anything other than explain things more effectively.

Baroness Ashton of Upholland: I have not for one second implied that. I said that we believe that, when looking at what is occurring, the board will look at the regulatory objectives. It will look at the impact of what has happened and make a judgment. That is what it is for. That is what we have set it up to do. It can say, "In the circumstances, we believe that action is required around this particular objective having been breached", having failed, there having been an omission or whatever. I have already indicated that one would hope that many of these issues are dealt with long before we get to that point, by dialogue and so forth, but they may occur. What matters is that we look at this case by case. In a particular set of circumstances, it is right and proper that the failure of one of the objectives requires action. It is not about ranking or anything other than the particular circumstances that exist.
	I accept the way in which the noble Lord, Lord Kingsland, began. Of course, the regulatory objectives as a whole are important. But it is quite clear that there could be a failure in one area that the board deems to be important. I will come to "significant", which I will not accept on the face of the Bill, but I do accept the principle behind the board looking to see what has occurred in each case. We think that that is completely reasonable. To tie the hands of the board any further would be wrong. I have made it clear that I will look and make sure that that reflection is as the Bill currently stands, and if it is not, I will be in touch with the Committee to discuss the matter.

Lord Kingsland: That is something, as I think that I indicated when introducing the amendment, with which we respectfully agree. It would be possible in our view, in the context of the amendment, for the board to act in relation to a breach of only one of the regulatory objectives as long as the breach was sufficiently serious to have an impact on the objectives taken together. That is the point—and it is a crucial point because it flows from the clear obligation on the board under Clause 1(1) to consider all the objectives. If it then decides that the breach of one of those objectives is so serious that there is an adverse effect on the objectives collectively, it may act.
	The Opposition would be extremely grateful if the Minister would reflect on this issue between now and Report. As I have in relation to one or two other amendments this afternoon, I think it only proper that I indicate to the Minister that this is one thatwe take very seriously. We hope that some accommodation can be reached between the Government and the House leading up to Report. Meanwhile, I beg leave to withdraw the amendment.

Lord Kingsland: These amendments again raise the issue of trigger conditions for regulatory action by the LSB, this time by ensuring that the board can exercise its powers only following a significant rather than a merely marginal adverse impact on the regulatory objectives. Under the new regulatory regime established by the Bill we again emphasise that lead responsibility is intended to rest with the approved regulators.
	Under the new regime for approved regulators, with the splitting of the regulatory and representative arms, the regulatory bodies will be appointed on known principles and there will be substantial lay involvement. In those circumstances the approved regulators are entitled to expect considerable discretion to act on their own analysis of what is appropriate. The board should not exercise its powers simply because it would have reached a different decision. As long as the board is satisfied that the approved regulator has taken into consideration all the factors that it should have done, the fact that the board might disagree with the decision of an approved regulator should not be grounds for intervention. If it were, then in effect the board would become a front-line regulator, which is precisely what the noble Baroness says that the Bill does not intend to do.
	Again, as the Government themselves said in their response to the Joint Committee, the Legal Services Board should exercise its powers only when an approved regulator is "clearly failing". Those are the Government's own words. In our submission the Bill as it stands does not reflect this philosophy as it allows intervention whenever there is evidence of adverse impact, whether significant or not. To bring to life the Government's own vision of a light-touch regulator that intrudes only when one of the professional bodies is "clearly failing", there must be some qualifying adjective. We have suggested the word "significant", but "serious" is another possibility. Any sort of impact or qualification would be better than simply an adverse impact. I beg to move.

Baroness Butler-Sloss: I am not entirely sure how appropriate it is to put forward ideas which do not come within the existing amendments. However, I hope that the Minister might consider a possible alternative under Clause 31, headed "Directions". I suggest that subsection (1)(a) should read,
	"that an act or omission of an approved regulator is likely to have an adverse impact".
	If one could ask the board to take into account and be satisfied, having taken into account their duties under Clause 3, which refers back to its general duties, it may be that that would meet what was needed. I do not know; I have not consulted anyone else. I am concerned that this does not necessarily remind the board of its Clause 3 duties.

Baroness Ashton of Upholland: I say to the noble and learned Baroness that we are always delighted to get suggestions to reflect on. It is one of the great joys of Committee stage that noble Lords are able to help us think things through. There is so little between us on these issues. We are concerned to make sure that the powers are used effectively and that we do not hamper the powers by putting in additional words, which the noble and learned Baroness will know very well can lead to the kind of legal unravelling that one would not wish to see. I am happy to take it away; I have no idea whether it will work. I am happy to think about it.

Lord Brennan: I will briefly add to what has just been said. The "adverse impact" test for trigger for intervention is a very loose phrase. It is far more important, as far as many on these Benches are concerned, to have that test properly defined as against the kind of phrase that featured in the last group of amendments. What about "substantial"? It was not generally welcomed on Second Reading, but I remind the Minister that in the Corporate Manslaughter Bill, which is presently going through this House, the word "substantial" is expressly used to determine criminal liability fit for a jury to decide. Why not "substantial" or "serious" in this context? This is not a semantic quibble; it is a desire to have the national and international reaction to this Bill, in this context, see that there are serious hurdles before you can intervene.

Lord Campbell of Alloway: There seems to be different ideas of what constitutes a fair balance. This is not the time of the evening to discuss it.

Lord Kingsland: I agree with my noble and learned friend that this group and the previous group should be looked at together and that if we can find a solution that reflects what we are seeking to achieve, we should not worry excessively as to whether the words of one amendment or another are respected in terms.
	Before I withdraw the amendment, I shall allow myself a final reflection. We have talked much this afternoon about the relationship between the Legal Services Board and the approved regulators and have said that the LSB is the supervisor and that the primary regulator is the approved regulator.
	In responding to the last intervention made before my noble and learned friend stood up, the noble Baroness was keen to emphasise the concerns of the consumer lobby; she mentioned that on a number of occasions throughout the afternoon. One of the difficulties that we face in the Bill is that althoughthe Government have accepted the Clementi philosophy—that the front-line regulators are the approved regulators—the impression is growing on me that the consumer lobby does not trust the approved regulators and that the only regulator that it trusts is the Legal Services Board. That is why the noble Lord, Lord Whitty, intervened in the previous amendment and is, I suspect, why the Government are reluctant to put on the face of the Bill the principle that they say is the governing principle that lies behind the Bill—that the approved regulators are the primary regulators.
	It is late in the evening and my reflection is general rather than being specifically related to the Bill; but if I am right about this, we have a problem, do we not? Try as we might, the Government's concerns about the consumer lobby would always prevent them from putting the Clementi philosophy on the face of the Bill.

Baroness Ashton of Upholland: Let me be clear about the Government's position. I think that I mentioned the consumer lobby on only three occasions today, although it may feel like more to the noble Lord. In the main, my references concerned the consumer panel. I hope that noble Lords will not mind my saying that I am also aware that, save for the presence of my noble friend Lord Whitty, rather a large number of lawyers are involved in our debates. Although I am not suggesting that noble Lords do not have consumers very firmly in their minds, none the less it is important that we remind ourselves of the greater generality.
	Whatever the views of the consumer groups, the purpose of the legislation is to look for a good and proper form of regulatory regime that will give everyone—the professions, regulators and consumers—confidence in the system. I am entirely balanced in my view in this regard and I reflect the Government's balance. Sometimes in our debates I feel as though I am listening to a legal lobby and sometimes as though I am listening to a consumer lobby, and sometimes the noble Lord, Lord Kingsland, thinks that I am more attuned to the consumer lobby than I am to any other. The purpose of our Committee stage is to enable us to reflect on all these different aspects and to end up with a Bill that is in good heart and fit for purpose, and I find our debates extremely interesting.
	The Government accept that there is a strong, important and critical role for the approved regulator. My noble friend Lord Whitty is absolutely right to say that we would not expect the Legal Services Board to act very often but, when it does, we would expect it to act properly.